Certara Inc (CERT)

Interest coverage

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Earnings before interest and tax (EBIT) (ttm) US$ in thousands -5,877 -19,575 -60,433 -39,693 -32,227 -12,100 49,320 41,941 40,971 42,072 28,254 26,512 25,045 -44,110 -36,500 -27,903 -24,885 33,010 33,530 25,076
Interest expense (ttm) US$ in thousands 21,520 22,386 23,102 23,192 22,916 22,491 21,809 20,020 17,773 15,616 13,684 16,137 16,837 19,035 21,675 22,366 25,296 26,803 20,874 13,851
Interest coverage -0.27 -0.87 -2.62 -1.71 -1.41 -0.54 2.26 2.09 2.31 2.69 2.06 1.64 1.49 -2.32 -1.68 -1.25 -0.98 1.23 1.61 1.81

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-5,877K ÷ $21,520K
= -0.27

The interest coverage ratio of Certara Inc has shown fluctuations over the period from March 31, 2020, to December 31, 2024. Initially, the company had a moderate interest coverage ratio around 1.5 to 2. However, there were some periods, particularly in the latter half of 2020 and throughout 2021, where the ratio turned negative, indicating that the company's operating income was insufficient to cover its interest expenses during those periods.

Subsequently, there was a gradual improvement in the interest coverage ratio in 2022 and 2023, reaching levels above 2, which is generally considered healthy. However, the ratio saw a decline again in the following periods, dropping below 0. This suggests that Certara Inc may have faced challenges in generating enough profit to cover its interest payments during those times.

Overall, the fluctuating trend in Certara Inc's interest coverage ratio indicates varying levels of financial risk related to the company's ability to meet its interest obligations with its operating income. Continuous monitoring and management of the company's financial performance and debt levels are crucial to ensure stability and financial health in the long term.